Mumbai, April 28 :     Lafarge India, a subsidiary of the French global construction materials major, today announced an all-cash deal to acquire Raymond Ltd's 2.4 million tonne capacity cement division for a sum of Rs 785 crore. The acquisition will strengthen Lafarge's presence in eastern India and raise its cement-making capacity from 2 million tonnes to 4.24 million tonnes from three cement units. Lafarge is acquiring the plant as a going concern. The final agreement was signed yesterday by Raymond managing director Gautam Hari Singhania and Lafarge India CEO Thomas Farrell. The cement division of Raymond has a dry process cement plant with 2.24 million tonnes capacity located at Bilaspur in Madhya Pradesh. This is Lafarge's second major acquisition in the cement industry after the buyout of Tisco's two million tonne cement operation in eastern India in November 1999. Describing it as a 'win-win deal' for both parties, Singhania said: 'We have been working on the company's restructuring for some time and this is a significant step'. Farrell said: 'Due to the proximity of Raymond's cement plant to our key eastern India markets, this acquisition is an important strategic step for Lafarge in India, providing considerable synergies with our existing operations. Lafarge will gain by virtue of the fact that its existing plant is just 100 kms from the Raymond's plant. The acquisition will strengthen its position in the east. The acquisition is, however, more expensive than the Tisco deal because the cost works out to $80 per tonne as against $ 70-75 for the Tisco unit.' Raymond, which paid the price for diversifying away from its core business by getting into sectors like cement and steel businesses, will use a portion of the funds to pre-pay some of its debts. 'We will negotiate with financial institutions to pre-pay a portion of the debts', said Pradeep Bhandari, a senior official at Raymonds. The total debt component of Raymonds is around Rs 764 crore. The company will also use a portion of the funds to strengthen its presence in the textile, garments and retail distribution businesses. 'We may also look at some acquisitions in our core business,' he added. Lafarge chairman T Thomas rubbished reports in a section of the media that said the cement major was planning to mount a hostile bid for Associated Cement Companies (ACC). 'It's very difficult for an MNC to make a hostile bid and we do not intend to make one at this juncture,' he said. Lafarge claimed that it has been making profits from the very first day that it started operating the plant acquired from Tisco. Raymonds also claimed that its cement division is in the black. It has a debt component of Rs 20 crore which the Indian company is likely to retain with itself. Kotak Mahindra Capital Company advised Lafarge on the acquisition.